Health Management Associates Inc.'s (HMA) second-quarter earnings fell 24% as the hospital operator was hit with higher operating costs and derivatives impacts.
Health Management, which operates 70 hospitals, has been focusing on cost controls and has entered partnerships with not-for-profit hospitals to help boost its bottom line. The company, which operates primarily in the Southeast, has benefited from increased revenue growth due to an increase in surgeries and admissions. In the latest period, admissions at continuing operations were up 7.1% and surgeries climbed roughly 21% on that basis.
Health Management reported a profit of $37 million, or 14 cents a share, down from $48.6 million, or 19 cents a share, a year earlier. Excluding derivatives impacts and other items, earnings from continuing operations were up at 21 cents from 20 cents.
Net revenue climbed 20% to $1.47 billion. Excluding provisions for doubtful accounts, net revenue jumped 21% to $1.69 billion. Loan-loss provisions were up 26% at $214.6 million.
Analysts polled by Thomson Reuters most recently projected earnings of 21 cents on revenue excluding the provisions for doubtful accounts of $1.64 billion.
Operating expenses were up 23%, including salaries and benefits growth of 18%.
On a same-hospital basis, admissions declined 4% while surgeries increased 2.9% and occupancies dropped to 40.3% from 42.7%. Net revenue per adjusted admission rose 6.3%.
Shares of Health Management, which affirmed its 2012 earnings guidance, closed Monday at $7.29 and were inactive in recent after-hours trading. The stock is down 1.1% this year despite the company and other hospital operators getting a substantial boost last month when the Supreme Court upheld the constitutionality of the Obama administration's health-care-overhaul legislation.
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